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Directors Report of Balaji Amines Ltd.

Mar 31, 2023

Your Directors are pleased to present the 35^th Annual Report together with the Audited Standalone and Consolidated Financial Statements of the Company for the year ended 31^st March, 2023.

1. FINANCIAL RESULTS

(H in Lakhs)
PARTICULARS	Standalone		Consolidated
PARTICULARS	2022-23	2021-22	2022-23	2021-22
REVENUE FROM OPERATIONS	1,72,628.31	1,92,066.56	2,35,539.56	2,32,288.36
Other Income	975.65	1,839.49	1,524.64	1,471.85
Total Revenue	1,73,603.95	1,93,906.05	2,37,064.20	2,33,760.21
Total Expenses excluding Depreciation, Finance Cost and Tax Expenses	1,39,667.06	1,47,971.09	1,74,628.17	1,70,021.50
Profit before Depreciation, Finance Cost and Tax Expenses	33,936.89	45,934.96	62,436.03	63,738.71
Less: Depreciation	3,126.24	2,916.85	4,557.34	4,199.86
Profit before Finance Cost and Tax Expenses	30,810.65	43,018.11	57,878.69	59,538.85
Less: Finance Cost	273.35	704.08	1,197.17	1,710.03
Profit before Tax	30,537.31	42,314.03	56,681.52	57,828.82
Current Tax	7,838.28	11,522.74	16,072.72	15,888.28
Adjustment of earlier years'' Tax	(55.18)	(2.81)	40.50	150.47
Total Tax	7,783.09	11,519.93	16,113.22	16,038.75
Profit after Tax	22,754.22	30,794.10	40,568.30	41,790.07
Other Comprehensive Income	(16.36)	-	(22.82)	-
Total Comprehensive Income	22,737.86	30,794.10	40,545.48	41,790.07
(a) Shareholders of the Company	22,737.86	30,794.10	32,551.96	36,841.88
(b) Non-controlling interests	-	-	8,016.34	4,948.19
Less : Transfer to Reserves	2,275.42	3,078.70	2,275.42	3,078.70
Balance	20,462.44	27,715.40	30,276.56	33,763.18
Balance of profit of earlier years	1,04,905.04	78,485.68	1,10,651.06	78,183.92
Add(Less): Final Dividend Paid, Other Comprehensive income net of taxes etc.	(1,944.06)	(1,296.04)	(2,113.36)	(1,296.04)
Balance Carried Forward	1,23,423.42	1,04,905.04	1,38,814.26	1,10,651.06

2. PERFORMANCE HIGHLIGHTS

Your company has achieved a Gross Income of H1,73,603.95 Lakhs on standalone basis during the financial year 2022-23. The Profit After Tax for the year stood at H22,754.22 Lakhs.

Further details of operations are given in the Management Discussion and Analysis Report which forms part of this report.

3. DIVIDEND

During the Financial Year, based on the Company''s performance, the Board of Directors have declared dividend of H10/- each per equity share at 500% of the face value of H2/- each, if approved by the Members would involve a cash outflow of H3,240.10 lakhs. Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a Dividend Distribution Policy and the same is herewith annexed as Annexure I'' to this report. The Dividend

Distribution Policy is posted on the website of the Company at http://www.balajiamines.com/pdf/1663741568DDP.pdf

4. TRANSFER TO RESERVES

The Company proposes to transfer a sum of H2,275.42 lakhs to the General Reserves. An amount of H18,518.38 Lakhs is proposed to be retained in the statement of profit and loss.

5. SUBSIDIARIES

Balaji Speciality Chemicals Limited (BSCL) is the only Subsidiary of the Company. BSCL is engaged in Manufacturing of Ethylenediamine (EDA), Piperazine (Anhydrous), Aminoethylpiperazine (AEP) and Diethylene triamine (DETA) and other Specialty Chemicals.

During the period under review, BSCL has filed the draft Red Herring Prospectus with SEBI for Initial Public Offering of Equity Shares on 10^th August, 2022 and subsequently obtained in-principle approvals from both the Stock Exchanges (i.e BSE and NSE) and received the final observations for filing of Updated Draft Red Herring Prospectus with SEBI.

6. CONSOLIDATED FINANCIAL STATEMENTS

As required pursuant to the provisions of Section 129 of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Regulations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements of the Company are prepared in accordance with the Indian Accounting Standards (Ind-AS) issued by the Institute of Chartered Accountants of India on the basis of the Audited Financial Statements of the Company and its Subsidiary.

As per the provisions of Section 136 of the Companies Act, 2013, the Company will also place separate audited accounts of its Subsidiaries on its website. The audited financial statements of the subsidiary are available on the website of the Company at http://www.balajiamines.com/investor-relations.

The Statement containing salient features of the financial statements of the subsidiaries in Form AOC-1 is attached as Annexure II'' to this Annual Report.

7. CREDIT RATING

The Credit Rating of the Company is affirmed during the year as "IND AA/ Stable/INDA1 " by India Ratings and Research Private Limited.

8. DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR

During the Financial Year 2022-23, no company ceased to be a subsidiary of the company and your company does not have any associates or joint ventures.

9. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE FINANCIAL YEAR

The constitution of the Board is in Compliance with the provisions of Section 149 of the Companies Act, 2013, and the Listing Regulations.

During the year 2022-23, there were no changes in the directors or key managerial personnel of the Company.

However, after the financial year following changes took place in the office of directors and key managerial personnel of the Company:

Mr. Hemanth Reddy Gaddam, Whole-time Director & CFO who has been designated as a Whole-time Director in Balaji Speciality Chemicals Limited, a subsidiary company has demitted from the office of Whole-time Director & CFO of the Company with effect from closing hours on 20^th May, 2023.

Mr. Naveena Chandra Thammishetty, Mr. Amarender Reddy Minupuri, Mr. Satyanarayana Murthy Chavali, Mr. Kashinath Revappa Dhole and Mrs. Vimala Behram Madon resigned from the office of Independent Director of the Company with effect from closing hours on 20^th May, 2023.

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 20^th May, 2023, appointed Dr. Suhasini Yatin Shah, Dr. Uma Rajiv Pradhan, Mr. Mohan Kumar Ramakrishna and Mr. Adabala Seshagiri Rao as Additional Directors under the Category of Independent Directors of the Company for a period of 5 years subject to the approval of members at this 35^thAnnual General Meeting of the Company.

Mr. Ande Srinivas Reddy, Whole-time Director retires by rotation and being eligible, offers himself for re-appointment at the 35^thAnnual General Meeting of the Company.

10. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. MEETINGS

During the year, four meetings of the Board of Directors were held, as more particularly disclosed in the attached Report on Corporate Governance. The intervening gap between any two meetings was within the prescribed period.

The number and dates of meetings held by the Board and its Committees, attendance ofDirectors and details of remuneration paid to them is given separately in the Report on Corporate Governance in terms of Section 134(3) (b) of the Companies Act, 2013.

None of the Directors are disqualified under Section 164(2) of the Act. Certificate on non-disqualification, as required under Regulation 34 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.

Committees of the Board

Details of committees of the Board, their composition and other details are provided in the Report on Corporate Governance, which forms part of this annual report.

Meetings of Independent Directors

As stipulated by the Code of Independent Directors under the Act and the Listing Regulations, one meeting of Independent Directors was held during the year. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, reviewed the performance of the Chairman of the Company.

12. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and regulations contained in the chapters of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance by the Directors individually (including Independent Directors) as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgments, safeguarding the interest of the Company.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

Familiarization program for Independent Directors

The Company familiarizes its Independent Directors pursuant to the requirements of the Listing Regulations with their roles, rights and responsibilities in the Company. The details of the familiarization programme imparted to Independent Directors of the Company during Financial Year 2022-23 are available on the website of the Company at http://www.balajiamines. com/pdf/1686306196Details%20of%20familiarisation%20 Programme%20for%20Independent%20Directors.pdf

It is the general practice of the Company to notify the changes in all the applicable laws from time to time in Board Meetings conducted.

13. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that, to the best of their knowledge and belief and according to the information and explanation available to them that-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2022-23 and of the statement of profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts for the year 2022-23 have been prepared on a going concern basis;

(e) the proper internal financial controls are in place and that the financial controls were adequate and were operating effectively.

(f) the proper systems have been devised to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively mentioned under various heads of the departments which are in turn reporting to the Whole-time Directors.

14. RESEARCH & DEVELOPMENT

Your Company has been carrying out continuous Research and Development activities in the following areas:

a) Adoption of advanced technology in recovering waste water has resulted in minimizing the impact on the environment and reiterated our focus on core principle of Reduce, Reuse and Recycle of all the resources.

b) Several improvements in the ACETONITRILE plant have been initiated which have resulted in lower consumption coefficient and higher efficiency of plant operations.

c) Backward & forward integration of products to improve value chain and better utilization of all the resources.

d) Identification of new products and development activities of latest process technologies are continuously worked on.

e) Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities & raw materials consumption and alternate routes are being looked at.

f) For sustainable usage of natural resources, the Company has initiated various methods and Processes, equipments for reducing, reusing and recycling of various natural resources

g) The R&D demonstration projects for the Manufacture of THF, NEM, NMM, NMMO and MIPA were undertaken during the year by your company.

15. EXPANSION/DIVERSIFICATION

a) N Butylamines: The new expansion project works are progressing at brisk speed. The Plant is expected to be commissioned during the FY 2023-24

b) Methylamines: The project implementation work is started. The project is likely to be commissioned around March -2024.

c) Dimethyl Ether (DME): This project is newly proposed to be taken up in Unit -IV, Second Phase with an installed capacity of 1,00,000 MT PA This is mainly used in the place of LPG either blended or directly. The expected commencement of commercial production is by end of FY 23-24.

d) Dimethyl Formamide(DMF):The Company has obtained the environmental clearance for the capacity of 36,000 MT PA. The project will be implemented on the basis of market situation.

e) Acetonitrile: The Company has obtained the environmental clearance for the capacity of 16,000 MT PA. The project will be implemented on the basis of market situation.

f) All other expansion plans are in the final stages of order placement for plant & machinery for long delivery equipment.

16. CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the year.

17. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments, if any affecting the financial position of your Company which have occurred after the closure of the Financial Year 2022-23 till the date of this Report.

18. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors and Senior Management personnel and fix their remuneration. The Remuneration Policy is placed on the website of the Company at the link: www.balajiamines. com/investor-relations.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements.

20. ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Act, the Annual Return of the Company as on 31^st March 2023 is available on the Company''s website at www.balajiamines.com/ investor-relations.

21. PARTICULARS OF EMPLOYEES

In term of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in ''Annexure III'' to this report.

22. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising policies and procedures designed and implemented to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources acquired are used optimally.

23. STATUTORY AUDITORS

M/s. M. Anandam & Co., Chartered Accountants (Firm Registration No. 000125S), were appointed as Statutory Auditors

of the Company for a period of 5 years from the conclusion of 34^th Annual General Meeting of the Company till the conclusion of 39^th Annual General Meeting of the Company.

The Independent Auditors Report given by M/s. M. Anandam & Co., Chartered Accountants, Statutory Auditors of the Company on Standalone and Consolidated Financial Statements of the Company does not contain any qualification, reservation or adverse remark.

24. REPORTING OF FRAUDS

During the year under review, there was no instance of fraud, which required the Statutory Auditors to report to the Audit Committee and /or Board under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

25. INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have appointed M/s. Aherkar & Co, Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on a monthly basis.

26. COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed Mr. Narayan D. Dontul, Practicing Cost Accountants, Solapur, (FRN No. 100224) as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2022-2023 on a remuneration of H75,000/- (Rupees Seventy Five Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a Resolution seeking Members'' approval for the remuneration payable to Mr. Narayan D. Dontul, Cost Accountants, is included at Item No. 4 of the Notice convening the Annual General Meeting.

27. SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT

Pursuant to provisions of Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. P. S. Rao & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report, pursuant to Section 204(1) of the Companies Act, 2013, for the financial year ended 31^st March, 2023 is given in ''Annexure IV'' attached hereto and forms part of this Report.

The Secretarial Audit Report of Unlisted Material Subsidiary, Balaji Speciality Chemicals Limited issued by M/s. P. S. Rao & Associates, Practicing Company Secretaries is forming part of the Report on Corporate Governance.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark on the Company.

As per Regulation 24A of the Listing Regulations, the Annual Secretarial Compliance Report issued by M/s. P.S. Rao & Associates, Practicing Company Secretaries pursuant to SEBI circular dated February 8, 2019 and is forming part of the Report on Corporate Governance.

28. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated a Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013, and as per Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 for the employees to report their grievances / concerns about instances of unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct by means of Protected Disclosure to the Authorized Officer or the Chairman of the Audit Committee.

The vigil mechanism / whistle blower policy may be accessed on the Company''s website at the link:http://www.balajiamines. com/pdf/1644382399whistle_blower_policy_balajiamines_ final.pdf.

29. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as ''Annexure V''.

30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

All related party transactions that were entered into during the financial year were at an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

During the year, all Related Party Transactions were placed before the Audit Committee and also to the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a foreseen and repetitive nature.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and the same can be accessed at the link: http://www.balajiamines.com/pdf/1549342970Policy-on-Related-Party-Transactions.pdf.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, in Form AOC-2 and disclosures under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as ''Annexure VI'' to this report.

31. RISK MANAGEMENT

The Company has constituted a Risk Management Committee and formulated a policy on Risk Management in accordance with the Companies Act, 2013 and Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Committee and its terms of reference are set out in the Report on Corporate Governance forming part of the Board''s Report. The Risk Management Policy of the Company is posted on the website of the Company and the web link: http://www.balajiamines.com/pdf/1 568700507Risk%20 Managment%20Policy.pdf.

32. CORPORATE SOCIAL RESPONSIBILITY

The Board in compliance with the provisions of Section 135(1) of the Companies Act, 2013, and rules made thereunder has constituted Corporate Social Responsibility (CSR) Committee. The details of the Committee and its terms of reference are set out in the Report on Corporate Governance forming part of the Board''s Report. The CSR policy has been placed on the Website of the Company and can be accessed through the link: http://www.balajiamines.com/pdf/1512734314Corporate%20 social%20reponsibility%20Policy.pdf. and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as ''Annexure VII'' to this Report.

33. FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance Sheet.

34. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY''S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

35. MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Schedule V of the Listing Regulations forms is shown in a separate section forming part of the Annual Report.

36. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, the Company has not filed any application or no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016.

37. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE-TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF During the year under review, the Company has not made any one-time settlement while taking any loans from the Banks or Financial Institutions.

38. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, your Company has complied with the respective Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, General Meetings and Dividend.

39. EMPLOYEE STOCK OPTIONS

The Company is yet to implement the ESOP Scheme.

40. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT WITH ENVIRONMENT, SOCIAL & GOVERNANCE

Business responsibility & Sustainability reporting for the year under review, as stipulated under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section forming part of the Annual Report.

41. CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its operations and activities. A Report on Corporate

Governance along with a Certificate from the Practising Company Secretaries of the Company regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report.

42. HUMAN RESOURCES

Your Company considers its Human Resource as the major strength to achieve its objectives. Keeping this in view, your Company takes all the care to attract, train and retain well qualified and deserving employees. The employees are sufficiently empowered and enabled to work in an environment that inspires them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company''s vision being accomplished.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of

Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. This policy is placed on the Company''s Website at http://www.balajiamines.com/ pdf/1645091304Anti%20Sexual%20Harassment%20Policy.pdf.

The following is a summary of sexual harassment complaints received and disposed of during the year:

No. of Complaints received : Nil No. of Complaints disposed off : Nil

44. LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company are listed on NSE Limited and BSE Limited. The annual listing fees for the year 2023-24 have been paid to these exchanges.

45. ACKNOWLEDGMENT

Your Directors express their sincere appreciation to the customers, members, dealers, employees, bankers, State and Central Government, Stock Exchanges and all the stakeholders for their cooperation and confidence reposed in the Company.

Mar 31, 2022

Your Directors present the Thirtieth Annual Report of your Company on the business and operations for the year ended 31^st March, 2022.

FINANCIAL HIGHLIGHTS

(? in lakhs)
	For the year ended 31^st March, 2022	For the year ended 31^st March, 2021
- Domestic	25,397.73	18,155.05
- Export including Incentive	3,819.32	4,441.91
Other Income	172.85	187.23
Total	29,389.90	22,784.19
Profit before Financial Charges, Depreciation, Exceptional Items & Tax	2,653.24	2,944.31
Financial Charges	320.44	447.07
Profit before Depreciation, Exceptional Items and Tax	2,332.80	2,497.24
Depreciation	808.09	816.30
Profit/(Loss) before Exceptional Items & Tax	1,524.71	1,680.94
Tax Expenses	419.61	(285.60)
Net Profit / (Loss)	1,105.10	1,966.54
Per share data
Basic Earnings per Share (?)	4.16	7.76
Diluted Earnings per Share (?)	4.11	7.40
Book Value per Share (?)	47.28	43.01

YEAR IN RETROSPECT

Profit before Finance Costs, Depreciation, Tax and Exceptional Items for the year stood at '' 2,653 lakhs (previous year '' 2,944 lakhs), a decrease of about 10%. The Company generated an operational cash profit of '' 2,333 lakhs during the year under review (previous year '' 2,497 lakhs), recording a decline of 7%. The Net Profit after Exceptional Items and Tax for the year is '' 1,105 lakhs (previous year '' 1,967 lakhs), a decline of 44%, mainly on account of recognition of Deferred tax assets during last year.

The decline in operating profit margins of the Company during the year was on account of higher raw material cost as compared to previous years.

Turnover of the Company for the year under review stood at '' 29,390 lakhs as against '' 22,784 lakhs in the previous year, a significant increase of about 29%, primarily on account of increase in product prices as well as increase in volumes as compared to the previous year, which was impacted on account of the Covid 19 pandemic and curtailed economic activity.

The Company''s business segment of Specialized Polyester Filament Yarn (SPFY), reported a full-year revenue of '' 25,096 lakhs (previous year '' 20,153 lakhs).

Overall exports of the Company decreased by 14% during the year under review, to '' 3,819 lakh (previous year '' 4,442 lakh). However, Embroidery and laces (EL) witnessed good demand in overseas markets, and exports in this segment were higher by 250% to '' 757 lakh (previous year '' 216 lakh).

Domestic market was optimistic for both SPFY and EL segments. Overall, domestic business grew 40% to '' 25,398 lakh (previous year '' 18,155 lakhs). SPFY reported domestic revenues of '' 22,034 lakhs (previous year '' 15,928 lakhs), a growth of 38%, while EL reported 51% higher domestic revenues of '' 3,364 lakh (previous year '' 2,228 lakh).

A detailed review of the performance during the year is given under the section - Management Discussion and Analysis Report as stipulated under Regulation 34 read with part B of Schedule V of Listing Regulations entered into with the Stock Exchanges is set out in a separate section and forms part of the Directors Report.

TRANSFER TO RESERVES

The Board does not propose to carry any amounts to reserves.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of Business of the Company. INDUSTRY OVERVIEW

Indian domestic textile and apparel market is estimated to be US$ 99 bn. in 2021-22, which has recovered 30% from, 2020-21. The market is expected to grow at a 10% CAGR from 2019- 20 to reach US$ 190 bn. by 2025-26.

India''s T&A exports were US$ 31 bn. in 2020-21 and are estimated to be US$ 40 bn. in 2021-22, a growth of approx. 28%. The exports are expected to reach US$ 60 bn. in 2025-26, growing at a CAGR of 11% from 2021-22.

India is the leading exporter of natural spun yarn (mainly cotton based). In several categories, it features among the top 5 global exporters - natural fibre, MMF spun yarn, filament yarn, woven fabric and home textiles.

India''s exports of technical textile grew at a CAGR of 9% since 2015-16 to ~USD 2,370 mn in 2020-21. India''s export of technical textile during April - October 2021 was USD 1,719 mn.

To encourage the manufacture and export of specified textile items made of man-made fibres, the government launched a production-linked incentive system. It is also developing seven textile parks in order to increase sales.

Your Company''s current expansion is in POY (Partially Oriented Yarn) and DTY (Draw Textured Yarn) segment. The total project cost is '' 58 Cr. , of which '' 18 Cr. would be from internal accruals and the balance will be funded through bank borrowings. Post-expansion, the total installed capacity of the Company will be 26,000 MTPA from the current 18,000 MTPA. The project is expected to be completed by the third quarter of the current year, and the new capacity will be fully operational by the fourth quarter of FY22-23. The major equipment is being sourced from Germany-based Oerlikon Barmag Group, a world-renowned supplier of quality textile extrusion equipment.

Your Company is looking to integrate its three facilities and replace old machines with modern efficient and high productive machines at GOI approved Shree Ganesh Integrated Textile Park Private Limited (SGITPL) situated at Dhule, Maharashtra.

BANK BORROWINGS

The total secured borrowings as on year-end FY22 stood at about '' 2,623 lakhs ('' 2,977 lakhs), including working capital of '' 1,416 lakhs (previous year of '' 1,163 lakhs). As a major portion of its long-term borrowings was repaid in the earlier years, the Company witnessed its financial charges drop by 28% for the year to '' 320 lakhs (previous year '' 447 lakhs).

LISTING

The Equity Shares of the Company are listed with the BSE & NSE.

The shares of the Company were earlier listed with Kolkata Stock Exchange and Delhi Stock Exchange also. However, the Company had submitted application for delisting of its shares from these Stock Exchanges in the year 2007 as approved by the shareholders in the Annual General Meeting held on 29^th December, 2006.

DIVIDEND

Your Directors are pleased to recommend final dividend @ of '' 0.30 (Thirty naya paise) per equity share of '' 10 each for the financial year 2021-22, The total outflow on account of dividend payout, once approved by the shareholders, would be '' 79.77 lakh. The said dividend shall be paid out of the current year profits.

During the year, there was no change in Company''s share capital.

SUBSIDIARY COMPANIES

The revenue of Hakoba Lifestyle Limited in current year stood at '' 1.87 lakh ('' Nil lakhs). Profit after tax and exceptional item stood at '' 1.46 lakh as compared to net loss of '' 0.82 lakhs in previous year.

The revenue of Crystal Lace (India) Limited in current year stood at '' 6.34 lakhs ('' 0.54 lakhs). The Company has incurred a net loss of '' 4.27 lakhs as compared to net loss of '' 88.65 lakh in previous year mainly on account of payment of property tax dues.

Pioneer Realty Limited had no activity during the year.

The statement of subsidiaries in Form AOC-1 (pursuant to first proviso to sub section (3) of section 129 of the Companies Act, 2013) is provided as Annexure - A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in compliance with applicable provisions of the Companies Act, 2013, and "Ind AS" issued by the Institute of Chartered Accountants of India as well as Listing Regulations as prescribed by the Securities and Exchange Board of India (SEBI) and form a part of the Annual Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance with Auditors Certificate confirming compliance, is attached and forms an integral part of this Report. Further, a declaration affirming compliance with the code of conduct by all the Board members and senior management personnel along with certificate under Regulation 17(8) of the SEBI Listing Regulations is also given in this Annual Report.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 are made available on the Company''s website (www.pelhakoba.com).

DIRECTORS

The Board at their meetings held on 3^rd August, 2021 had approved the appointment of Mr. D R Mehta as an Independent Director of the Company. Further, Mr. Gangadharan Panicker, Executive Director and Mr. D R Mehta, Independent Director resigns form the post of Director with effect from 11^th December, 2021. The Board places on record its'' appreciation for the contribution made during their tenure.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Harsh Vardhan Bassi (DIN: 00102941), who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Accordingly, his re-appointment forms part of the notice of the ensuing Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013:

Sr. No.	Name	Designation
1.	Mr. Harsh Vardhan Bassi	Managing Director
2.	Mrs. Ami Thakkar	Company Secretary
3.	Mr. Deepak Sipani	Chief Financial Officer (CFO)

BOARD PERFORMANCE/ EVALUATION

The performance evaluation of the non-executive directors is done by the Board annually. This evaluation is based taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as the attendance and contribution of the member at the Board/ Committee meetings. The

process also considers core competency, expertise, personnel characteristic and specific responsibility of the concerned Director.

The performance evaluation of the Chairman and the Managing Director was carried out by the Independent Directors in a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the view of the Executive Directors and Non-Executive Directors. A separate exercise was carried out to evaluate the performance of individual Directors who were evaluated on parameters such as level of engagement, contribution and independence of judgment. The Board of Directors expressed their satisfaction with the evaluation process.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY

All the Independent Directors have provided the declaration of Independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub-section (6) and SEBI LODR Regulations.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of the Company''s operations, to familiarize the new Independent Directors (IDs) with the Company''s business operations. The new IDs are given an orientation on our products, group structure and subsidiary Company, Board constitution and procedures, matters reserved for the Board, and the Company''s major risks and risk management strategy. The Policy on the Company''s Familiarisation Programme for Independent Directors can be accessed.

BOARD MEETINGS

The details of number of meetings of the Board, held during the year forms part of the Corporate Governance Report and hence not repeated here for the sake of brevity.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The details of unpaid and unclaimed amounts as on 31^stMarch, 2022 are uploaded on the Company''s website (www.pelhakoba.com).

As per amendment to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 dated 5^th September, 2016, 3750 shares have been transferred to IEPF suspense account on 4^th February, 2021.

Dividend of '' 937.50 on above shares (declared for the Financial Year 2020-2021) were transferred to IEPF account.

VIGIL MECHANISM

The Company has established a Vigil Mechanism/Whistle Blower Policy that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for an adequate safeguards against victimization of persons who use the Vigil Mechanism.

Details of the Vigil Mechanism/Whistle Blower policy are made available on the Company''s website (www. pelhakoba.com).

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY

Details of the Loans, Guarantees and Investment covered under the section 186 of the Companies Act, 2013 are given in the Financial Statements.

CREDIT RATING

There has been upgrade in Company''s credit rating pertaining to Long Term Bank facilities from "CARE BB; Stable" to "CARE BB ; Positive" and for Short Term Bank facilities from "CARE A4" to "CARE A4 ; Positive" received from CARE Ratings Ltd. letter bearing No. CARE/HO/ RL/2021-22/2573, dated 6^th October, 2021.

Further, the Company is pleased to inform that there has been upgrade in Company''s credit rating as per India Ratings and Research on 29^th April, 2022, as below:

Instrument Type	Rating
Fund Based Working Capital	IND BBB/Stable/IND A3
Limits
Non-Fund Based Working	IND A3
Capital Limits
Term Loan	IND BBB/Stable

NOMINATION AND REMUNERATION POLICY

The Committee has framed a policy to determine the qualification and attributes for appointment and basis of determination of remuneration of all the Directors, Key Managerial Personnel and Senior Management. A copy of the policy is annexed as Annexure -A.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in nature thus provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013, is included as Annexure - B and forms an integral part of this Report.

All related party transactions are placed before the Audit Committee as also to the Board for approval.

The Company has developed a Related Party Transactions Policy which has been uploaded on the website of the Company and web-link thereto has been provided in the Corporate Governance report.

DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT

The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act. Hence, the requirement for furnishing details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There is no material change affecting the financial position of the Company which have occurred between the end of the financial year.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

(i) that in the preparation of the Annual Accounts for the year ended 31^st March, 2022, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

(ii) that the accounting policies selected and applied are consistent and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^stMarch, 2022 and of the net profit of the Company for the year ended on that date;

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis;

(v) that the Directors had laid down adequate internal financial controls to be followed by the Company and these are operating effectively;

(vi) that adequate and proper systems to ensure compliance with all applicable laws have been devised and such systems are operating effectively in the Company.

STATUTORY AUDIT

The members of the Company at the 25^th Annual General Meeting (AGM) had appointed M/s. S. K. Naredi & Co. Chartered Accountants (Registration No.003333C) as the Statutory Auditor of the Company to hold office from the conclusion of 25^th AGM for the period of 5 years until the conclusion of the 30^th AGM of the Company. Accordingly, the present term of M/s. S. K. Naredi & Co. Chartered Accountants as Statutory Auditor concludes at the conclusion of the ensuing AGM. The Board of Directors of the Company placed on record their appreciation for the services rendered by M/s. S. K. Naredi & Co. Chartered Accountants, as the statutory auditor of the Company. In accordance with provision of Section 139 of the Companies Act, 2013 read with Rules framed thereunder, the Board of Directors of the Company on the recommendation of the Audit Committee, proposed appointment of M/s. M B A H & CO (ICAI Regn. No. 121426W), Chartered Accountants as Statutory Auditors of the Company to hold office from the conclusion of ensuing 30^th AGM for a term of consecutive five years till the conclusion of 35^th AGM.

The appointment of M/s. M B A H & CO (ICAI Regn. No. 121426W), Chartered Accountants as the statutory auditor of the Company is placed before the members for approval at the ensuing AGM. As required under provision of Section 139(1) of the Companies Act, 2013 the Company has received a written consent from M B A H & CO for their appointment and a certificate to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for appointment as statutory auditors of the Company. The members are requested to consider the appointment of statutory auditors as aforesaid and fix their remuneration.

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors i.e. M/s. S. K. Naredi & Co, Chartered Accountants in its report and therefore, there are no further explanations to be provided for in this report and is prepared as per "Ind AS".

COST AUDIT

The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s. Vipul Bhardwaj

& Co., Cost accountants, as Cost Auditor to audit the cost accounts of the Company for the year 2022-23 at a remuneration of '' 1,25,000 plus GST as applicable and reimbursement of out of pocket expenses. A resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. The Company has maintained cost accounts and records for the business, which is applicable as per Section 148(1) of the Companies Act, 2013 for the year ended 31^st March, 2022.

SECRETARIAL AUDIT

As required under Section 204 of the Companies Act 2013, and rules made thereunder, the Company has reappointed M/s. Sanjay Dholakia & Associates, a firm of Company Secretaries in Practice (Membership No.2655; C.P. No.1798) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - C and forms an integral part of this Report.

The qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditors in its report are self explanatory and therefore, there are no further explanations to be provided for in this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system, commensurate with its size, scale and complexity of its operations. The scope and authority of the Internal Audit function is also defined. The Audit Committee of the Board actively reviews the adequacy and effectiveness of the systems.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, corrective actions are undertaken in the respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, including audit of internal

financial controls over financial reporting, and the reviews performed by management and the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and operating effectively as at 31^st March, 2022.

During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

RISK MANAGEMENT

There is a continuous process for identifying, evaluating and managing significant risks faced through a risk management process designed to identify the key risks facing business. Risks would include significant weakening in demand from core-end markets, inflation uncertainties and any adverse regulatory developments, etc. During the year a risk analysis and assessment was conducted and no major risks were noticed.

IMPACT OF COVID 19

The COVID-19 pandemic continued to impact the social and business activity in India and across world. India was a witness to the second wave of the pandemic in March-June 21 period, driven by the Delta variant, which proved to be far more severe and fatal than the initial wave. The Omcron variant-let third wave in Jan 2022 was also highly infectious, but thankfully less deadly than the earlier waves.

Though society at large was greatly affected by the subsequent waves, and the resulting restrictions and lockdowns, the Government and India Inc were better prepared to deal with the impact on the Businesses. Economic growth and demand generally remained strong, except for few business segments, and movement of goods and core industrial activity witnessed lesser disruptions. The pace and expanse of vaccination also helped in normalization of business levels.

All our manufacturing sites remained functional during the year, while offices were operated with minimum desired staff for major part of the year As the pandemic refuses to go away completely, your Company continues to accord highest priority to the health and safety of its employees and their families, and also their financial well-being. We are also much better equipped and financially strong to address any disruptive situations going ahead.

SAFETY, HEALTH & ENVIRONMENT

The Company, in order to ensure health and safety of its employees and other staff, took adequate pre-emptive measures to enhance the hygiene and sanitization protocols across all offices and plants, in line with guidelines in force by local authorities. The health of the employees coming to work space is being continuously monitored for any signs of the health complications and adequate containment measures are in place. Your Company is committed to maintain its efforts in providing a safe working environment to its employees. At the same time, we are keeping our plants operational and thus, trying to contribute towards the restoration of the economic activity and provide earnings to labor and staff.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Employees are considered to be team members being one of the most critical resources in the business which maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Company''s Polices and Systems. The Company takes various HR initiatives to align the HR policy to the growing requirements of Business.

Your Company regularly conducts technical and safety training programmes.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

There are no orders passed by the Regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14, the Internal committee constituted under the said act has confirmed that no complaint/case

has been filed/pending with the Company during the year. MANAGERIAL REMUNERATION

a. Details of the remuneration of each director to the median remuneration of the employees of the Company and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - D.

b. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, are attached as Annexure-E to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company seeks to build constructive relationship with all the stakeholders and wants to benefit from your Company''s presence. The Company had formed the CSR Committee and has framed a CSR policy, which has been uploaded on the website of the Company. The provisions of CSR activities under Companies Act 2013 were applicable to your Company. A detail pursuant to Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure -F.

Employee Stock Option Plan (ESOP)

There is no material change in the ESOP scheme and the same is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. Details of ESOP and scheme are made available on the Company''s website (www.pelhakoba.com).

As per Regulation 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, a certificate received from the Secretarial auditor of the Company that the scheme(s) has been implemented in accordance with these regulations and in accordance with the resolution of the Company in the general meeting is annexed as Annexure -G.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

During the year, there were no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year, the Company had not made any One Time Settlement with any banks or Financial Institutions.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by Institute of Company Secretaries of India on Meeting of Board of Directors and General Meetings.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the Government Authorities, Shareholders, Valued Customers, Company''s Bankers, Raw Material Suppliers and other Business Associates for their continued support and cooperation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the revival of your Company.

Mar 31, 2019

DIRECTOR''S REPORT

To,

The Members,

Balaji Amines Limited

The Directors are pleased to present to you the 31^st Annual Report along with the Audited Statement of Accounts of the Company for the year ended 31^st March, 2019.

1) FINANCIAL RESULTS (Rs. in Lakhs)

Particulars	2018-19	2017-18
Revenue from Operations	94983.16	86123.36
Other Income	521.85	407.37
Total Revenue	95505.01	86530.73
Profit before Finance Charges, Tax Expenses, Exceptional items and Depreciation	19862.28	19356.73
Less : Depreciation	1955.39	1928.79
Profit before Finance Charges, Tax Expenses, Exceptional items	17906.89	17427.94
Less : Finance Charges	1302.59	904.01
Profit before Tax Expenses and Exceptional items	16604.30	16523.93
Add : Exceptional Items	355.99	59.91
Profit before Tax	16960.29	16583.84
Provision for Tax	5152.68	5265.74
Profit after Tax	11807.61	11318.10
Total Comprehensive Income	11807.61	11318.10
Less : Transfer to Reserves	1181.00	1132.00
Balance	10626.61	10186.10
Balance of profit of earlier years	40086.94	30758.79
Less : Dividend Paid on Equity Shares	842.43	712.82
Dividend Distribution Tax	171.52	145.13
Balance Carried Forward	49699.60	40086.94

2) PERFORMANCE HIGHLIGHTS

Your company has achieved a Gross Income of Rs. 94983.16 Lakhs during the financial year 2018-19 an increase of 8.60% over the previous year. The Profit After Tax for the year stood at Rs. 11807.61 Lakhs as against previous year Profit After Tax of Rs. 11318.10 Lakhs registering an increase of 4.32% over previous year.

Further details of operations are given in the Management Discussion and Analysis Report which forms part of this report.

3) DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of Rs. 2.80/- per share that is 140% on paid up value of Rs. 2/- per share (previous year 130% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 1091. 92 Lakhs (previous year Rs. 1013.94 Lakhs).

4) TRANSFER TO RESERVES

The Company proposes to transfer a sum of Rs. 1181.00 Lakhs to the General Reserves. An amount of Rs. 10626.61 Lakhs is proposed to be retained in the statement of profit and loss.

5) SUBSIDIARIES

Balaji Speciality Chemicals Private Limited (BSCPL) is the only Subsidiary of the Company, BSCPL is engaged in Manufacturing of Ethylenediamine (EDA), Piperazine (Anhydrous), Aminoethylpiperazine (AEP) and Diethylene thiamine (DETA) and other Specialty Chemicals.

6) CONSOLIDATED FINANCIAL STATEMENTS

As required pursuant to the provisions of Section 129 of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Regulations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India on the basis of the audited financial statements of the Company and its subsidiaries.

The Statement containing salient features of the financial statements of the subsidiaries in Form AOC-1 is attached as ''Annexure I'' to this Annual Report.

7) CREDIT RATING

The Credit Rating of the company is upgraded during the year from IND A to "IND AA-" (long term) Stable by India Ratings and Research.

8) DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the Financial Year 2018-19, no company ceased to be subsidiary of the company and your company does not have any associates or joint ventures.

9) DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

The constitution of the Board is in Compliance with the provisions of Section 149 of the Companies Act, 2013, and the Listing Regulations.

Mr. A. Srinivas Reddy retires by rotation and, being eligible, offers himself for re-appointment at the 31st Annual General Meeting (AGM) of the Company scheduled to be held on 26th July, 2019.

The Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, experience and the contribution made by Mr. T. Naveena Chandra, Mr. M. Amarender Reddy, Mr. C.S.N. Murthy, Mr. Kashinath R. Dhole and Mrs. Vimala B. Madon during their tenure, has recommended to the Board that continued association of Mr. T. Naveena Chandra, Mr. M. Amarender Reddy, Mr. C.S.N. Murthy, Mr. Kashinath R. Dhole and Mrs. Vimala B. Madon as Independent Directors of the Company for the second term would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends re-appointment of Mr. T. Naveena Chandra, Mr. M. Amarender Reddy, Mr. C.S.N. Murthy, Mr. Kashinath R. Dhole and

Mrs. Vimala B. Madon.

There has been no change in the Directors and KMPs during the year under review.

10) DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfil the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015.

11) MEETINGS

During the year, four meetings of the Board of Directors were held as more particularly disclosed in the attached Report on Corporate Governance. The intervening gap between any two meetings was within the prescribed period.

The number and dates of meetings held by the Board and its Committees, attendance of Directors and details of remuneration paid to them is given separately in Corporate Governance Report in terms of Section 134(3)(b) of the Companies Act, 2013.

12) BOARD EVALUATION

As mandated under the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the annual performance evaluation of the Directors individually vis-a-vis the Board and its committees have been carried out. The manner of such evaluation has been disclosed in the Corporate Governance Report.

13) DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation available to them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 201819 and of the statement of profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2018-19 have been prepared on a going concern basis;

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively

That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in turn reporting to the Whole-time Directors.

14) RESEARCH & DEVELOPMENT

Your Company has been carrying out continuous Research and Development in the following areas:

a. Identification of new products and development activities of latest process technologies are continuously worked on.

b. Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities & raw materials consumption and alternate routes are being looked at.

c. Backward and forward integration of products to improve value chain and better utilization of all the resources.

d. Adoption of advanced technology in recovering waste water has resulted in minimizing the impact on environment and concentration of core principle of Reduce, Reuse and Recycle of all the resources.

e. Several improvements in Polyvinyl Pyrrolidone plant have been initiated and resulted in lower consumption co-efficient.

f. For sustainable usage of natural resources, the Company has initiated various models in reducing, reusing and recycling of various natural resources.

g. The R&D demonstration projects for IPA, MIPA and Betaine HCL were undertaken during the year by your company.

h. After successful development of the process, the pilot plant-cum-demonstration plants shall be taken up for implementation

15) EXPANSION / DIVERSIFICATION

a. Your Company has been allotted 90 Acres of Land at MIDC, Chincholi and the Maharashtra State Government has accorded "Mega Project" Status for this new Project.

b. The Environment clearances and consent for establishment have been obtained for several products. Your company has entered into agreement for detailed engineering initially for the first phase for manufacture of Ethylamines, IPA/MIPA.

16) CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the year.

17) MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of your Company have occurred after the closure of the Financial Year 2018-19 till the date of this Report.

18) REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors and Senior Management personnel and fix their remuneration. The Remuneration Policy is posted on the website of the Company at the link: www.balajiamines.com/investor-relations

19) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements.

20) EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an Extract of Annual Return as on the financial year ended on 31st March, 2019, in Form No. MGT-9 is annexed herewith and marked as ''Annexure II'' forming part of this report.

21) PARTICULARS OF EMPLOYEES

The Company had five employees including the Whole-time Directors who were in receipt of remuneration of not less than Rs.1,02,00,000 during the year ended 31st March, 2019 or not less than Rs. 8,50,000 per month during any part of the year.

A statement pursuant to the Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ''Annexure III'' to this report.

None of these employees are relative of any Director of the Company.

22) DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising of policies and procedures designed and implemented to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources acquired are used optimally.

23) STATUTORY AUDITORS

M/s. Ayyadevara & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of 5 Years from the Conclusion of 29th Annual General Meeting of the Company till the conclusion of 34th Annual General Meeting of the Company subject to ratification by members in every Annual General Meeting.

However, by the Companies (Amendment) Act, 2017, provisions pretaining to ratification of appointment of Statutory Auditor has been omitted with effect from 7th May, 2018. Hence, the agenda for ratification of appointment of M/s Ayyadevara & Co., Chartered Accountants, as Statutory Auditors has not been proposed in the Notice convening the Annual General Meeting.

The Independent Auditors report given by M/s. Ayyadevara & Co., Chartered Accountants, Statutory Auditors of the Company on standalone and consolidated Financial Statements of the Company does not contain any qualification, reservation or adverse remark.

24) INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. Aherkar & Co, Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis.

25) COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed Mr. N.V.S. Kapardhi, Practicing Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2019-20 on a remuneration of Rs. 60,000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a Resolution seeking Members'' approval for the remuneration payable to Mr. N.V.S. Kapardhi, Cost Accountants, is included at Item No. 4 of the Notice convening the Annual General Meeting.

26) SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT

Pursuant to provisions of Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board has appointed M/s. P. S. Rao & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report, pursuant to Section 204(1) of the Companies Act, 2013, for the financial year ended 31st March, 2019 is given in ''Annexure IV'' attached hereto and forms part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

27) VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated a Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013, and as per Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the employees to report their grievances / concerns about instances of unethical behaviour, actual or suspected fraud or violation of Company''s Code of Conduct by means of Protected Disclosure to the Authorized Officer or the Chairman of the Audit Committee.

The vigil mechanism / whistle blower policy may be accessed on the Company''s website at the link: www.balajiamines.com/investor-relations

28) ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as ''Annexure V''.

29) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and the same can be accessed at the link: www.balajiamines.com/investor-relations

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, in Form AOC-2 and disclosures under Schedule V of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, is annexed as ''Annexure VI'' to this report.

30) DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY, WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY

The company has risk management mechanism and policy in place which mitigates the risk at appropriate situations and there are no elements of risk, which in opinion of board of directors may threaten the existence of the company.

31) CORPORATE SOCIAL RESPONSIBILITY

The Board in compliance with the provisions of Section 135(1) of the Companies Act, 2013 and rules made thereunder has constituted CSR Committee with Mr. Kashinath R. Dhole, Independent Director, Mr. D. Ram Reddy, Managing Director and Mr. N. Rajeshwar Reddy, Joint Managing Director of the Company as its Members. The CSR policy has been placed on the Website of the Company and can be accessed through the link: www.balajiamines.com/investor-relations and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as ''Annexure VII'' to this Report.

32) FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

33) DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY''S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

34) MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Schedule V of the Listing Regulations forms an integral part of this report.

35) CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a

Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report.

36) HUMAN RESOURCES

37) DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed of during the year:

No. of complaints received : Nil

No. of complaints disposed of : Nil

38) ACKNOWLEDGMENTS

Your Directors express their sincere appreciation to the customers, members, dealers, employees, bankers, State and Central Government, Stock Exchanges and all stakeholders for their cooperation and confidence reposed in the Company.

For and on Behalf of the Board of Directors

Sd/-

A. Prathap Reddy

Date: 15.5.2019 Executive Chairman

Place: Secunderabad (DIN: 00003967)

Mar 31, 2018

DIRECTOR''S REPORT

Dear Shareholders,

The Directors have immense pleasure in presenting the 30^th Annual Report of the company along with Audited financial Statements for the financial year ended 31^st March, 2018

1. FINANCIAL RESULTS

The performance of your Company financial year ended 31^st March, 2018 is Summarized below: in Lacs)

Sr.No.	PARTICULARS	CURRENT YEAR (2017-18)	PREVIOUS YEAR (2016-17)
1.	Gross Income	87700.36	72730.33
2.	Net Income	86769.11	67244.96
3.	Expenditure	67352.47	51205.83
4.	Profit before interest, depreciation and tax	19416.64	16039.13
5.	Depreciation	1928.79	1822.07
6.	Interest and Finance Charges	904.01	1168.61
7.	Profit before tax	16583.84	13048.45
8.	Provision for taxes (including DTL)	5265.74	4491.13
9.	Profit after tax	11318.10	8557.32
10.	Dividend for the year (including corporate dividend tax)	1013.94	857.95
11.	Reserves (Excluding Revaluation reserves)	46058.33	37078.55
12.	EPS (Rs) on face value of Rs. 2/- each share	34.93	26.41
13.	Book value (Rs.) on face value of Rs. 2/- each share	144.22	116.44

2. PERFORMANCE HIGHLIGHTS

Your company has achieved a Gross Income of Rs. 87700.36 Lakhs during the financial year 2017-18 an increase of 20.58% over the previous year. The Profit After Tax for the year stood at Rs. 11318.10 Lakhs as against previous year Profit After Tax of Rs. 8557.32 Lakhs registering an increase of 32.26% over previous year.

Further details of operations are given in the Management Discussion and Analysis Report which forms part of this report.

3. DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of Rs. 2.60/- per share that is 130% on paid up value of Rs. 2/- per share (previous year 110% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 1013.94 lakhs (previous year Rs. 857.95 lakhs).

4. TRANSFER TO RESERVES

The Company proposes to transfer a sum of Rs. 1132 lakhs to the General Reserves. An amount of Rs. 10186.10 lakhs is proposed to be retained in the statement of profit and loss.

5. SUBSIDIARIES

a. Amalgamation of Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited with the Company

Application for merger of subsidiary companies Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited with our Company was approved by National Company Law Tribunal and the Subsidiary Companies are merged with this Company with effect from 1^st April, 2016.

b. Investments in Balaji Speciality Chemicals Private Limited

During the year under review, your Company has invested an amount of Rs. 66 crores by subscribing 2,20,00,000 equity shares of Rs. 10 each fully paid-up at a premium of Rs. 20 on preferential allotment basis constituting 55% of the post allotment paid-up equity share capital of Balaji Speciality Chemicals Private Limited (BSCPL) and with this investment BSCPL has become a subsidiary of your Company

BSCPL was incorporated in the year 2010 in India. The Company has initiated to set up manufacturing facilities at Maharashtra Industrial development Corporation (MIDC) layout at chincholi, Solapur, Maharashtra for manufacture of ethylene diamine (EDA), piperazine and diethylenetriamine (DETA) and other speciality chemical products.

6. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

Subsidiary Companies Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited cease to be subsidiaries of the Company pursuant to approval of merger by National Company Law Tribunal of both the Companies with our Company. Further Balaji Speciality Chemicals Private Limited has become subsidiary of the Company pursuant to an investment of Rs. 66 Crores made by the Company in the equity shares of Balaji Speciality Chemicals Private Limited during the FY 2017-18.

Your Company does not have any Joint Ventures.

7. CONSOLIDATED FINANCIAL STATEMENTS

As required pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Regulations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India on the basis of the audited financial statements of the Company and its subsidiaries.

The Statement containing salient features of the financial statements of the subsidiaries in Form AOC-1 is attached as ''Annexure I'' to this Annual Report.

The Credit Rating of the company were upgraded to "INDA " (long term) and "IND A1 " (short term) by India Ratings and Research.

9. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR:

The Board of Directors of the Company, at its Meeting held on 14^th May, 2018 pursuant to the recommendations of the Nomination and Remuneration Committee and subject to the approval of Members at the ensuing Annual General Meeting of the Company:

(a) Appointed Mr. A. Prathap Reddy as Executive Chairman of the Company for a period of three years with effect from 14^th May, 2018 on the same terms and conditions as approved by the Members at the 28^th AGM of the Company.

(b) Appointed Mr. D. Ram Reddy as Managing Director of the Company for a period of three years with effect from 14^th May, 2018 on the same terms and conditions as approved by the Members at the 28^th AGM of the Company.

In accordance with the provisions of the Companies Act, 2013, Mr. N. Rajeshwar Reddy (DIN No: 00003854) Director retires by rotation and being eligible has offered himself for re-appointment.

The constitution of the Board is in Compliance with the provisions of Section 149 of the Companies Act, 2013 and the Listing Regulations.

A brief profile of the Directors of the Company is annexed herewith as ''Annexure- II¹ to this report.

During the year under consideration Mrs. Arati V. Bandi, resigned as the Company Secretary and Compliance

The Board of Directors, on the recommendation of Nomination and Remuneration Committee, appointed Ms. Jimisha Parth Dawda as the Company Secretary & Compliance Officer of the Company with effect from 1^st November, 2017.

10.

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfil the criteria of independence as prescribed under sub-section (6) of section 149 of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015.

11. MEETINGS

The number and dates of meetings held by the Board and its Committees, attendance of Directors and remuneration paid to them is given separately in Corporate Governance Report in terms of Section 134(3)(b) of the Companies Act, 2013.

12.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation available to them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2017-18 and of the statement of profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2017-18 have been prepared on a going concern basis;

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

vi. That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in turn reporting to the Whole-time Directors.

14. RESEARCH & DEVELOPMENT

Your company is one of the leaders in Specialty Chemicals in the International Specialty Chemical arena and top of the table in India in its field.

Your Company has been carrying out continuous Research and Development activities in the following areas :

a. Identification of new products and development of latest process technologies are continuously worked on.

b. Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities & raw materials consumption and alternate routes are being looked at.

c. Backward and forward integration of products to improve value chain and better utilization of all the resources.

e. Several improvements in Polyvinyl Pyrrolidone plant have been initiated and resulting in lower consumption co-efficient.

f. For sustainable usage of natural resources, the Company has initiated various models in reducing, reusing and recycling of various natural resources.

g. The R&D demonstration projects for Acetonitrile, MIPA and DPA were undertaken during the year 2017-18 by your company.

h. After successful development of the process, the pilot plant-cum-demonstration plant shall be taken up for implementation.

15. EXPANSION / DIVERSIFICATION

a. Your Company has been allotted 90 Acres of Land at MIDC, Chincholi and the Maharashtra state Government has accorded "Mega Project" Status for this new Project.

b. The new plant for manufacture of Morpholine and Acetonitrile is commissioned after successful trial runs and ready to be operational.

16. CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the year.

17. MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of your Company have occurred after the closure of the Financial Year 2017-18 till the date of this Report.

18. REMUNERATION POLICY

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

20. Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an Extract of Annual Return as on the financial year ended on 31^st March, 2018, in Form No. MGT-9 is annexed herewith and marked as ''Annexure III'' forming part of this report.

21. The Company had five employees including the Whole-time Directors who were in receipt of remuneration of not less than Rs.1,02,00,000 during the year ended 31^st March, 2018 or not less than Rs. 8,50,000 per month during any part of the year.

A statement pursuant to the Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ''Annexure-IV'' to this report. None of these employees are relative of any Director of the Company.

22. THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising of policies and procedures designed and implemented to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources acquired are used optimally.

23. STATUTORY AUDITORS

M/s. Ayyadevara & Co., Chartered Accountants, are the Statutory Auditors of the Company, who were appointed as Statutory Auditors of the Company for a period of 5 Years from the Conclusion of 29^thAnnual General Meeting of the Company till the conclusion of 34^th Annual General Meeting of the Company.

The Independent Auditors report given by M/s. Ayyadevara & Co., Chartered Accountants, the Statutory Auditors of the Company on standalone and consolidated Financial Statements of the Company does not contain any qualification, reservation or adverse remark.

24. INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. Aherkar 8i Co, Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis.

25. In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed Mr. N.V.S. Kapardhi, Practicing Cost Accountants, Hyderabad, being

eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2018-19 on a remuneration of Rs. 60,000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a Resolution seeking Members'' approval for the remuneration payable to Mr. N.V.S. Kapardhi, Cost Accountants, is included at Item No. 4 of the Notice convening the Annual General Meeting.

26. Pursuant to provisions of Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board has appointed M/s. P. S. Rao 8i Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report, pursuant to Section 204(1) of the Companies Act, 2013, for the financial year ended 31^st March, 2018 is given in ''Annexure V'' attached hereto and forms part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

27. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated a Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013, and as per Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the employees to report their grievances / concerns about instances of unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct by means of Protected Disclosure to the Authorised Officer orthe Chairman of the Audit Committee.

The vigil mechanism / whistle blower policy may be accessed on the Company''s website at the link: www.balajiamines.com/investor-relations

28.

OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as ''Annexure-VI''.

29. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year, all Related Party Transactions were placed before the Audit Committee and also to the Board for approval. Prior omnibus approval of the Audit Committee was obtained on a quarterly basis for the transactions which were of a foreseen and repetitive nature.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, in Form AOC-2 and disclosures under Schedule V of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, is annexed as ''Annexure VII'' to this report.

30. CORPORATE SOCIAL RESPONSIBILITY

The Board in compliance with the provisions of Section 135(1) of the Companies Act, 2013, and rules made thereunder has constituted CSR Committee with Mr. Kashinath R. Dhole, Independent Director, Mr. D. Ram Reddy, Managing Director and Mr. N. Rajeshwar Reddy, Joint Managing Director of the Company as its Members. The CSR policy has been placed on the Website of the Company and can be accessed through the link: www.balajiamines.com/investor-relations and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as ''Annexure VIII'' to this Report.

31. FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY''S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

33. MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Schedule V of the Listing Regulations forms an integral part of this report.

34. CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a Certificate from

the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed to this Report.

35. HUMAN RESOURCES

36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition &Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year No. of complaints received : Nil

- No. of complaints disposed of: Nil

37. ACKNOWLEDGMENTS

For and on Behalf of the Board of Directors

A. Prathap Reddy

Date : 23 ^rd July, 2018 Executive Chairman

Place : Secunderabad DIN : 00003967

Mar 31, 2017

DIRECTOR''S REPORT

Dear Shareholders

The Directors have immense pleasure in presenting the Twenty Ninth Annual Report of the company along with Audited Financial Statements for the year ended 31st March, 2017

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year is as under:

(RUPEES IN LAKHS)

SL. NO.	PARTICULARS	CURRENT YEAR (2016-17)	PREVIOUS YEAR (2015-2016)
1.	Gross Income	72730.33	68900.29
2.	Net Income	67244.96	63716.75
3.	Expenditure	51205.83	50603.10
4.	Profit before interest, depreciation and tax	16039.13	13113.65
5.	Depreciation	1822.07	1789.72
6.	Interest and Finance Charges	1168.61	2008.49
7.	Profit before tax	13048.45	9315.44
8.	Provision for taxes (including DTL)	4491.13	3188.38
9.	Profit after tax	8557.32	6127.06
10.	Dividend for the year (including corporate dividend tax)	857.95	779.96
11.	Reserves(Excluding Revaluation reserves)	36220.60	28521.23
12.	EPS ( Rs) on face value of Rs. 2/- each share	26.41	18.91
13.	Book value (Rs.) on face value of Rs. 2/- each share	113.79	88.03

OPERATING RESULTS AND BUSINESS

Your company has achieved a Gross Income of Rs. 727.30 Crores during the financial year 2016-17 an increase of 5.57% over the previous year. The Profit After Tax for the year stood at Rs.85.57 Crores as against previous year Profit After Tax of Rs. 61.27 Crores registering an increase of 39.66% over previous year.

During the year, most of the commodity prices have been volatile due to fluctuation of oil and gas supply position. Inspite of this, your Company could post outstanding performance across the board

EXPORTS

The Exports of the company have grown in value and volume with an accompanying increase in product mix. The REACH certification and certificate of suitability has improved our positioning with International Customers. The Company''s products are well established in the Global Market.

DIVIDEND

Your Directors are pleased to recommend for approval of the members a dividend of Rs. 2.20/- per share (110% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 857.95 lakhs.

SUBSIDIARIES

The Company has 2 subsidiaries viz. Bhagyanagar Chemicals Ltd. a 100% subsidiary Company and Balaji Greentech Products Ltd. a substantially owned subsidiary.

Wherein, the undertaking of Bhagyanagar Chemicals Limited is limited to only a long term lease to its 100% holding company Balaji Amines Limited who is carrying out manufacturing activity therein. As such the company Bhagyanagar Chemicals Limited does not have any transactions except of lease rentals. Responsibility of safe keeping of the assets of the company vests with the holding company Balaji Amines Limited.

Balaji Greentech Products Limited (BGPL) is into manufacturing of energy efficient lamps and components. The company manufactures, supplies a comprehensive range of Compact Fluorescent Lamps (CFL).

During the year, Company has initiated merger process of its subsidiaries as approved by the respective Boards. Present status of the merger is awaiting for NOC /approval of stock exchanges for the proposed merger.

TRANSFER TO RESERVES

The Company proposes to transfer a sum of Rs. 860.00 lakhs to the General Reserve out of the amount available for appropriations and an amount of Rs. 6839.37 lakhs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have resulted in excellent results during the year with improved consumption co-efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical arena and plans to be on the top of the table in the years to come in India.

Your Company has been carrying out continuous Research and Development activities in the following activities.

- Identification of new products and development of latest process technologies are continuously worked on.

- Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption and alternate routes are being looked at.

- Backward and forward integration of products to improve value chain and better utilization of all the resources.

- Adoption of advanced technology in recovering waste water has resulted in minimizing the impact on environment and concentration of core principle of Reduce, Reuse and Recycle of all the resources.

- Several improvements in Polyvinyl Pyrrolidone plant have been initiated and resulting in lower consumption co-efficient as well as research on addition of new stream of k-values being explored for which R&D Pilot plant is successful.

- For sustainable usage of natural resources, the Company has initiated various models in reducing, reusing and recycling of various natural resources.

EXPANSION / DIVERSIFICATION

The following R&D demonstration projects were undertaken during the year 2016-17:

1. Acetonitrile

2. Cartico Steroids

3. PVPK-90, Cross Povidone etc.

The results of these projects will be yielding fruits in the years to come.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to Sub Section (3) of Section 129 of The Companies Act, 2013, we are required to prepare consolidated financial statements for the financial year ended 31st March 2017.

The Consolidated Financial Statement of your Company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited and substantial owned subsidiary Balaji Genentech Products Limited is provided in the Annual Report.

The annual accounts of the Subsidiary Companies and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited shall also be kept for inspection by any of the members at the registered office of the company during the specified working hours.

The Statement containing salient features of the subsidiaries as per Sub-Sections (3) of Section 129 of The Companies Act 2013 in Form AOC -1 is herewith annexed as Annexure-I to this report.

STATUTORY AUDITORS

The term of M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Statutory Auditors of the Company, will expire on the conclusion of ensuing Annual General Meeting. Hence it is proposed to appoint M/s. Ayyadevara & Co., Proprietor, Ayyadevara Srinivas as Statutory Auditor for a period of 5 years from FY. 2017-2018 to FY. 2021-2022.

The company has received letter from M/s. Ayyadevara & Co., Chartered Accountants under Section 139(1) of the Companies Act, 2013 and the Rules framed there under confirming their eligibility to the effect, that, their appointment, if made, would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such appointment within the meaning of the section of the said Act.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. S.P. Jawalkar & Associates, Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis. It is hereby noted that, the previous Internal Auditors Mr. Aherkar''s untimely demise has warranted this new appointment. The Company placed on record the services rendered by Mr. Aherkar.

COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed Mr. N.V. S Kapardhi, Practicing Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2017-18 on a remuneration of Rs.60000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a resolution seeking Members'' approval for the remuneration payable to Mr. N.V.S Kapardhi, Cost Accountants, is included at Item No.5 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P. S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-III" to this report.

Explanation to the Observations of Secretarial Auditors:

"The Promoter has clarified that the same has occurred due to inadvertent transfer of shares from the pool account of Depository Participant. Hence this transaction was missed out and subsequently promoter has made necessary disclosures to the stock exchanges.

DIRECTORS & COMMITTEES

In terms of Article 134 of the Articles of Association of the company Mr. D. Ram Reddy, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

His profile and the experience in specific functional areas and other directorships held by him as stipulated in Regulations of the Securities and Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 is provided in the Additional Information Section forming part of Notice.

The said resolution forms part of the notice of the Annual General Meeting

Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013 and the Company has taken the note of the same

None of the directors is disqualified as on 31st March 2017 from being appointed as director in terms of sections 164(2) of the Act. A brief Profile of the Directors of the Company is annexed herewith as ''Annexure-IV'' to this report.

The board has 6 committees, Audit Committee, Stake Holder''s Relationship Committee, Research & Development Committee.

Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Merger Committee. The composition, meetings and the terms of reference of the Committees are given in the corporate governance report, which forms part of this Annual Report

All recommendations made by Audit Committee were accepted by the Board.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

During the year there was no changes in the composition of Board of Directors, none of the directors have resigned during the year. NUMBER OF MEETINGS OF THE BOARD DURING THE YEAR

The Full Board of Directors of the Company met 4 (four times) and there was l(one) Independent Directors meeting held during the year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the year.

MATERIAL CHANGES AND COMMITMENTS

The following material changes and commitments occurred during the year under review affecting the financial position of the Company:

The Board of Directors of the Company in their Meeting held on 06.02.2017, have unanimously approved the Scheme of Amalgamation between Balaji Amines Limited (Transferee Company) and Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited. The implementation of the Scheme of Amalgamation is subject to the approval of Shareholders and Creditors of the Company and all applicable regulatory authorities including SEBI/Stock Exchange and Honourable National Company Law Tribunal of Judicature at Mumbai for the State of Maharashtra.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, and size and complexity of its operations. Internal control systems comprising of policies and procedures designed and implemented to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources are acquired are used economically.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation available to them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2016-17 and of the statement of profit of the Company for that period;

iv. The annual accounts for the year 2016-17 have been prepared on a going concern basis.

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in turn reporting to the Whole Time Directors.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company and the web site is http://www.balajiamines.com/pdf/WbPolicy.pdf

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 and disclosures under Schedule V of Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, is annexed as ''Annexure-V'' to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure- VI" to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34(2) (e) of the Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis forms part of the Annual Report and is herewith annexed as ''Annexure-VII'' to this report.

PARTICULARS OF EMPLOYEES

A statement pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ''Annexure-VIII'' to this report.

CORPORATE GOVERNANCE

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of Listing regulations, a detailed report on Corporate Governance for the year 2016-17 pursuant to Regulation 34 of Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 is annexed as "Annexure- X" to this report.

Certificate from the Auditors of the Company regarding compliance of Corporate Governance is furnished along with this Annual Report.

HUMAN RESOURCES

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section I34(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-IX" to this report.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, according to the provisions of Section 135 of The Companies Act, 2013, Corporate Social Responsibility activities are taken up by the Company, the company has constituted a Corporate Social Responsibility committee and has adopted a Corporate Social Responsibility Policy.

A detailed annual report on Corporate Social Responsibility activities under taken by the company during the year is attached as Annexure-II.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year:

- No. of complaints received: Nil

- No. of complaints disposed off : Nil

ACKNOWLEDGMENTS

Your Directors take this opportunity to express their appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co-operation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, Banks, Customers and suppliers.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place: Secunderabad A. PRATHAP REDDY

Date: 11/05/2017 CHAIRMAN & MANAGING DIRECTOR

DIN: 00003967

Mar 31, 2015

Dear Memers,

The Directors have immense pleasure in presenting the Twenty Seventh Annual Report of the company with Audited Financial Statements for the year ended 31st March, 2015

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year are as under: ( Rs. in Lacs )

CURRENT PREVIOUS YEAR YEAR SR PARTICULARS (2014-15) (2013-14) NO 1. Total Income 60825.01 61272.89

2. Expenditure 50250.32 51911.05

3. Profit before interest, depreciation and tax 10574.69 9361.84

4. Depreciation 1859.02 1646.49

5. Interest and Finance Charges 3141.60 3151.04

6. Profit before tax 5574.07 4564.31

7. Provision for taxes (including DTL) 1938.25 1212.04

8. Profit after tax 3635.82 3352.27

9. Dividend for the year (including corporate dividend tax) 466.55 376.58

10. Reserves(Excluding Revaluation reserves) 23124.54 19576.02

11. EPS (Rs) on face value of Rs. 2/- each share 11.22 10.35

12. Book value (Rs.) on face value of Rs. 2/- each share 73.37 62.42

OPERATING RESULTS AND BUSINESS

Your company has achieved a Gross turnover of Rs.657.97 Crores during the financial year 2014-15.The PAT for the year stood at Rs.36.36 Crores. As against previous year PAT of Rs.33.52 Crores registering an increase of 8.5%.

During the year, most of the commodity prices have fallen globally due to low demand for oil and gas and excess supply position. Your company could post satisfactory performance despite the slow down.

EXPORTS

The Exports of the company have grown marginally in value and there was over all increase in volume and mix of products. The REACH certification and certificate of suitability has improved Exports. The Company's products are well established in the Global Market.

DIVIDEND

Your Directors have pleasure in declaring dividends to shareholders and are pleased to recommend for approval of the members a dividend of Rs. 1.20/- per share (60% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs.466.55 lacs.

SUBSIDIARIES

The company is having a wholly owned subsidiary Bhagyanagar Chemicals Limited and substantially owned subsidiary Balaji Greentech Products Limited.

Wherein, the undertaking of Bhagyanagar Chemicals Limited is limited to only a long term lease to its 100% holding company Balaji Amines Limited who is carrying out manufacturing activity therein. As such the company Bhagyanagar Chemicals Limited does not have any transactions except of lease rentals. Responsibility of safe keeping of the assets of the company vests with the holding company Balaji Amines Limited.

During the year Balaji Amines limited has extended its holdings and have acquired and is holding 66% of shareholdings of Balaji Greentech Products Limited (BGPL).

Balaji Greentech Products Limited (BGPL) is into manufacturing of energy efficient lamps and components. The company manufactures, supplies a comprehensive range of Compact Fluorescent Lamps (CFL).

The Statement containing the salient features of the subsidiaries as per sub -sections (3) of section 129 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure I to this report.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.363.59 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs.2805.68 lacs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have yielded excellent results during the year with improved efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Speciality Chemicals in the International Speciality Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development activities in the following activities.

* Unit - 3 R&D Centre, has been awarded recognition by Government of India, Ministry of Science and Technology.

* DMF (Dimethyl Formamide) and CO (Carbon Monoxide) plants have been recommissioned successfully and yields of the plants are satisfactory considering the intricate process being developed in house R & D.

* Several improvements in Polyvinyl Pyrrolidone plant resulting in lower consumption coefficients as well as research on addition of new stream of k-values being explored.

* Identification of new products and development of latest process technologies are continuously worked on.

* Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption.

* Backward and forward integration of products to improve value chain and better utilization of all the resources.

* Adoption of advanced technology in improvement of processes resulting in minimizing the impact on environment and concentration of core principle of Reduce, Reuse and Recycle all the resources.

EXPANSION / DIVERSIFICATION

The following expansion/ diversification projects were undertaken during the year 2014-15:

* DMF and CO plants are being re-commissioned with satisfactory results.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to the general Circular 08/2014 No. 1/19/2013-CL-V of Ministry of Corporate Affairs Dated 04.04.2014 for Applicability with regard to relevant financial Year , the company have complied with provisions, rules and regulations under the companies Act 1956.

In pursuance to the Sub Section (3) of Section 129 of the Companies Act, 2013, company is required to prepare consolidated financial statements for the financial year ended 31st March 2015.

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited and substantial holding Company Balaji Greentech Products Limited is provided in the Annual Report.

The annual accounts of the Subsidiary Companies and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited shall also be kept for inspection by any of the members at the registered office of the company.

The Statement containing the salient features of the subsidiaries as per sub -sections (3) of section 129 of the Companies Act 2013 in Form AOC -1 is herewith annexed as 'Annexure I' to this report.

STATUTORY AUDITORS

V. Sridhar & Co, Chartered Accountants (ICAI Firm Registration No. 006206S), Hyderabad were appointed as the statutory auditors of the Company for the Financial year 2014-15 at the Annual General Meeting (AGM) of the Company held on September 29, 2014 and hold office until the conclusion of the ensuing Annual General Meeting.

V. Sridhar & Co, Chartered Accountants have been the Auditors of the Company since FY 1996-97 and have completed a term of 18 years. As per the provisions of Section 139 of the Act, no listed company can appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. Section 139 of the Act also provided a period of three years from the date of commencement of the Act to comply with this requirement. In view of the above, V. Sridhar & Co, Chartered Accountants being eligible for re-appointment and based on the recommendation of the Audit Committee, the Board of Directors has, at its meeting held on July 30, 2015, proposed the appointment of V. Sridhar & Co, Chartered Accountants as the statutory auditors of the Company to hold office from the conclusion of this 27th Annual General Meeting (AGM) till the conclusion of next Annual General Meeting of the Company i.e 28th Annual General Meeting to be held in the year 2016.

The company has received letter and a certificate from the Auditors under Section 139(1) of the Companies Act, 2013 and the Rules framed there under of their eligibility and consent for re-appointment to that effect, that, their appointment, if made, would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such re appointment within the meaning of the section of the said Act.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. Aherkar & Co., Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis.

COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed M/s. Kapardhi & Associates, Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 201516 on a remuneration of Rs. 60000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a resolution seeking Members' approval for the remuneration payable to M/s. Kapardhi & Associates, Cost Accountants, is included at Item No.5 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act,2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P. S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure III" to this report.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Sri A. Srinivas Reddy, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

His profile and the experience in specific functional areas and other directorships held by him as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

The said resolution forms part of the notice of the 27th Annual General Meeting

Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013.

None of the directors is disqualified as on March 2015 from being appointed as director in terms of sections 164(2) of the Act. A brief Profile of the Directors of the Company is annexed herewith as 'Annexure IV' to this report.

Details of Directors or Key Managerial personnel who were appointed or resigned during the year

During the financial year 2014-15 Mr. S. V. Pattabhiraman, Independent Director of the Company has resigned from the company w.e.f. 14-11 -2014 and Mrs. Vimala B. Madon has been appointed as Independent Director of the Company w.e.f. 28-07-2014 Mr. G. Hemanth Reddy who is acting as whole-time Director of the company is also appointed as Chief Financial officer of the company w.e.f. 07-03-2015.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with

proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit or loss of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2014-15 have been prepared on a going concern basis.

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company and the web site is http://www.balajiamines.com.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 is herewith annexed as 'Annexure V' to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as 'Annexure VI' to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis formspart of the Annual Report and is herewith annexed as 'Annexure VII' to this report.

PARTICULARS OF EMPLOYEES

None of the employees fall under the purview of the provisions provided under the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 who's details are required to be disclosed .

A statement pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is herewith annexed as 'Annexure VIII' to this report.

CORPORATE GOVERNANCE

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance for the year 2014-15 and a Certificate from the Auditors of the Company are furnished which form part of this Annual Report.

HUMAN RESOURCES

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes all the care to attract and retain well qualified and deserving employees. The employees are sufficiently empowered and enable to work in environment that propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as 'Annexure IX' to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

During the year misappropriation of coal purchase by two employees of the company has been detected by the management and legal proceedings initiated against the said employees. The stock of coal in transit has been misappropriated by the said employees of the company and the amount involved is Rs. 31.71 lacs.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, according to the provisions of Section 135 of Companies Act, 2013 Corporate Social Responsibility are attracted to the Company. And as required by the provisions, the company have constituted a Corporate Social Responsibility committee and also have adopted a Corporate Social Responsibility Policy.

A detailed annual report on Corporate Social Responsible activities under taken by the company during year is attached as 'Annexure II'.

ACKNOWLEDGMENTS

Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co-operation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, Banks, Customers and suppliers.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/- Place: Secunderabad A. PRATHAP REDDY Date : 30/07/2015 CHAIRMAN & MANAGING DIRECTOR

Mar 31, 2014

Dear Shareholders

The Directors have immense pleasure in presenting the Twenty Sixth Annual Report of the company with Audited Financial Statements for the year ended 31st March, 2014.

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year are as under :

(RUPEES IN LAKHS)

SL. PARTICULARS CURRENT YEAR PREVIOUS YEAR NO. (2013-2014) (2012-2013)

1. Gross Sales 66741.45 55633.36

2. Less: Excise Duty 5728.82 4453.76

3. Net Sales 61012.63 51179.60

4. Other Income 260.26 371.04

5. Total Income 61272.89 51550.64

6. Expenditure 51911.05 43158.00

7. Profit before interest, 9361.85 8392.63 depreciation and tax

8. Depreciation 1646.49 1268.79

9. Profit before 7715.36 7123.84 interest & tax

10. Interest and Finance 3151.04 2540.12 Charges

11. Prior Period items ---- 11.88

12. Profit before tax 4564.31 4595.60

13. Provision for taxes 1212.04 1477.25 (including DTL)

14. Profit after tax 3352.27 3118.35

15. Dividend for the year 376.58 489.55 (including corporate dividend tax)

16. Transfer to reserve 335.23 311.84

17. Balance carried forward 2640.46 2316.96 to Balance Sheet

18. Reserves(Excluding 19576.20 16600.33 Revaluation reserves)

19. EPS ( Rs) on face value 10.35 9.62 of Rs. 2/- each share

OPERATING RESULTS AND BUSINESS

Your Company achieved exceptional performance though there was general slowdown in economy and bleak outlook of domestic Chemical Companies. Your company has achieved a Gross turnover of Rs. 667.41 Crores as compared to Rs. 556.33 Crores during the previous year. Your company registered an impressive year on year growth of 19.96% in gross sales. Profit after Tax stands at Rs. 33.52 Crores in the current year as compared to Rs. 31.18 Crores for the previous year.

The performances is attributed to increase in value chain of some of the products and plant efficiencies which has impacted the consumption co-efficient of materials compared to previous year and with stringent cost control measures in almost all the areas possible by all the team members at all plants your Company was able to showcase its performance and has demonstrated this performance in these competitive market.

Present anti dumping duties on imports of Morpholine from China PR, EU and USA has resulted in reducing price pressure from such dumped imports on Morpholine produced and supplied by the Company in the Indian market. However, imports (dumped) of Morpholine from the above stated countries are still taking place at significant levels forcing the Company to keep its prices below reasonable levels to match the imported dumped price of Morpholine. Existing duties are essential to re-establish fair play in the market and counter act continued dumped imports from the above said countries. Also, PVPK-30 produced by the Company is facing unfair competition in the Indian market on account of cheap imports of the same primarily from China PR. The Company would pursue the legal options available with it under the WTO regime to prevent this unfair practice so as to observe fair play in the Indian market. Anti dumping duties on both these products will have a significant bearing on the profitability of the Company from this segment.

EXPORTS

The Exports of the company has grown marginally in value and there was over all increase in volume and mix of products. The REACH certification and certificate of suitability has improved Exports growth by 12% over the previous year from Rs. 131.52 Crores to Rs. 148.44 Crores. The Company''s products are well established in the Global Market due to international standard maintained in the quality.

DIVIDEND

Your Directors have pleasure in continuing to maintain the track record of declaring dividends to shareholders and are pleased to recommend for approval of the members a dividend of Re 1/- per share (50% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 376.58 lacs.

The auditors vide clause (ix)(b) to the annexure to their report referred to the liability in dispute regarding Income Tax to the tune of Rs. 2.16 Crores and for the penalty amount to the tune of Rs. 1.47 Crores. At the time of the audit the matter was pending before the Hon''ble Income Tax Appellate Tribunal, Pune. Subsequently the Hon''ble Income Tax Appellate Tribunal, Pune has allowed the appeal in favour of the company. Consequent to such order both the Tax liability and penalty will not exist.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 335.23 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2640.46 lacs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have yielded results during the year with improved efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development activities in the following activities.

* Unit - 3 R&D Centre, has been awarded recognition by Government of India, Ministry of Science and Technology.

* Several improvements in Polyvinyl Pyrrolidone plant resulting in lower consumption coefficients as well as research on addition of new stream of k-values being explored.

* Identification of new products and development of latest process technologies are continuously worked on.

* Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption.

* Backward and forward integration of products to improve value chain and better utilization of all the resources.

* Adoption of advanced technology in improvement of processes resulting in minimizing the impact on environment and concentration of Reduce, Reuse and Recycle all the resources.

EXPANSION / DIVERSIFICATION

The following expansion/ diversification projects were undertaken during the year 2013-14:

* During the year Company''s 5 star Hotel Property has started commercially from 1-11-2013 which is being managed by Sarovar Group of Hotels. The hotel division is consistently showing growth in revenues on month to month basis.

FIXED DEPOSITS

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Shri. N. Rajeshwar Reddy, retire by rotation and being eligible, offer himself for reappointment at the ensuing Annual General Meeting.

The Company had, pursuant to the provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges, appointed Shri. T. Naveena Chandra, Shri. S.V. Pattabhiraman, Shri. M. Amarender Reddy , Shri. Chavali Satyanarayana Murthy and Shri. Kashinath R. Dhole as Independent Directors at various times, in compliance with the requirements of the said clause.

As per the provisions of Section 149(4) which has come into force with effect from 1st April, 2014, every listed company is required to have at least one-third of the total number of Directors as Independent Directors. Further, Section 149(10) of the Act provides that an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation pursuant to Section 149(13) read with Section 152 of the Act.

The Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement which would be effective from October 1st, 2014 inter alia stipulates the conditions for the appointment of Independent Directors by a listed company.

The Nomination & Remuneration Committee has recommended the appointments of these Directors as Independent Directors to hold the office for five consecutive years for a term with effect from the conclusion of this 26th Annual General Meeting.

The above Independent Directors have given a declaration to the Board that they meet the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, the above Independent Directors fulfill the conditions specified in the Act and the Rules made there under for appointment as Independent Directors and they are independent of the management.

In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of the above Directors as Independent Directors is being placed before the Members in General Meeting for their approval.

Their profile and the experience in specific functional areas and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to the general Circular 08/2014 No. 1/19/2013-CL-V of Ministry of Corporate Affairs Dated 04-04-2014 for Applicability with regard to relevant financial Year , the company have complied with provisions , rules and regulations under the companies Act 1956.

And hence as per Section 212 of the Companies Act, 1956, we are required to attach the, Balance Sheet, Statement of Profit and Loss and other documents of our subsidiary. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2013-14 does not contain the financial statements of our subsidiary. The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report. The annual accounts of the Subsidiary and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the registered office of the company.

Statement pursuant to exemption under Section 212 of the Companies Act, 1956 relating to Subsidiary Company is enclosed as Annexure -1 PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

AUDITORS

i. Statutory Auditors

V. Sridhar & Co, Chartered Accountants (ICAI Firm Registration No. 006206S), Hyderabad were appointed as the statutory auditors of the Company for the Financial year 2013-14 at the Annual General Meeting (AGM) of the Company held on 30th September, 2013 and hold office until the conclusion of the ensuing Annual General Meeting.

The company has received from the Auditors under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder a certificate of their eligibility and consent for re-appointment. to the effect that, their appointment, if made , would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such re appointment within the meaning of section of the said Act.

Pursuant to the provisions of section 139 of the companies act 2013 and other applicable provisions of the act the board of directors have recommended M/s V. Sridhar & Company as statutory auditor of the company to hold the office with effect from 1st of April 2014 by passing the resolution and have authorized Shri A. Prathap Reddy the Chairman and Managing Director to fix their remuneration.

ii. Internal Auditors

According to section 138 of the Companies Act 2013, read with rule 13 of The Companies (accounts) Rules 2014 requires the company to appoint internal auditor. The current internal Auditor M/s. Aherkar& Co, Chartered accountants, Solapur being eligible, they have offered themselves for their re-appointment. The Board of Directors have reappoint M/s. Aherkar & Co, Chartered accountants, Solapur as Internal Auditor of the company to hold the office w.e.f 1st of April 2014 by passing the resolution and have authorized Shri A. Prathap Reddy the Chairman and Managing Director to fix their remuneration.

iii. Cost Auditors

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors for the Financial Year 2014-15 is proposed for the approval of the shareholders in the Notice of the AGM.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed here to.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of section section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and statement of profit and loss of the company for that period:

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

(iv) the directors have prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure 2 and forms part of this report.

CORPORATE GOVERNANCE

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

INDUSTRIAL RELATIONS

The relationships with employees, suppliers and customers across the Company are cordial.

CORPORATE SOCIAL RESPONSIBILITY

According to Sec.135 of The Companies Act 2013, our Company requires to constitute a Corporate Social Responsibility Committee and also adopt Corporate Social Responsibility Policy so as to ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, for the betterment of the society as a whole.

The Board at its meeting held on 28th July 2014 have constituted the CSR Committee and approved the Corporate Social Responsibility (CSR) Policy.

The company during the year to mitigate the water shortages due to severe drought conditions in Solapur and Osmanabad Districts has distributed water tanks of permanent nature (i.e. RCC tanks)of 3000 Litres Capacity and provided water troughs for the livestock in some of the villages apart from providing other facilities for rural people with the association of its Social Organisation "Balaji Foundation and Research Centre."

ACKNOWLEDGMENTS

Your Directors acknowledge with appreciation for the services rendered by the employees of the company at all the levels towards its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from the stake holders.

Your Directors sincerely thank all the Customers, Vendors, investors, Bankers, Insurance companies, Consultants, advisors, stock exchanges and Government authorities for their continuous support throughout the year.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place : Solapur Date : 28/07/2014 CHAIRMAN

Mar 31, 2012

The Directors have pleasure in presenting the 24th Annual Report of the company with Audited Financial Statements for the year ended 31 March, 2012.

Financial Results

The financial highlights for the current year in comparison to the previous year are as under:

(Rupees in Lakhs)

Sl No Particulars Current Year Previous Year (2011-12) (2010-11)

1. Gross Sales 48595.72 37472.10

2. Less: Excise Duty 3643.37 2795.13

3. Net Sales 44952.35 34676.97

4. Other Income 284.51 174.26

5. Total Income 45236.86 34851.23

6. Expenditure 36886.90 28371.52

7. Profit before interest, depreciation and tax 8350.03 6479.70

8. Depreciation 1034.50 826.10

9. Profit before interest & tax 7261.30 5653.60

10. Interest and Finance Charges 2120.57 1355.83

11. Prior Period items 79.12 _

12. Profit before tax 5274.07 4297.78

13. Provision for taxes (including DTL) 1707.90 1636.42

14. Profit after tax 3566.17 2661.36

15. Dividend for the year (including corporate dividend tax) 301.26 226.69

16. Transfer to reserve 356.62 266.14

17. Balance carried forward to Balance Sheet 2908.29 2168.53

18. Reservest Excluding Revaluation reserves) 13957.84 10706.63

19. EPS (Rs) on face value of Rs. 2/- each share 11.01 8.21

Operating Results and Business

During the year, your company has achieved a Gross turnover of Rs. 485.95 Crore as compared to Rs. 374.72 Crore during the previous year. Your company registered an impressive 'year on year' growth of 29.68%. Profit After Tax achieved is Rs. 35.66 Crore in the current year as compared to Rs. 26.61 Crore recording a growth of 34 % during the current year.

Your Company's excellent performance is primarily attributed to the efficient usage of plants, product mix, increase in value chain and increase in plant efficiencies. These measures have optimised the consumption coefficients of materials compared to previous year. Stringent cost control measures were implemented by alt the team members at all plants.

Exports

The net exports have increased by 39.83% over the previous year figures of Rs. 75.43 Crore to Rs. 105.48 Crore. The Company's products are welt placed in the Global Market. During the year, your company has received Certificate of Suitability for PVP K 30 from EU regulatory authorities which go through stringent Quality checks before awarding the same. Your company is the first company to register for this product from India. Your Company is the only Company to register under REACH for manufacture and supply of NMP and we are also on schedule for registration of other selected products from our portfolio under REACH certification and expects to continue being able to Export to European markets after REACH deadlines.

Dividend

The Directors are pleased to recommend for approval of the members a dividend of Rs 0.80/- per share ( 40% on paid up value of Rs.2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs.301.26 Lakhs.

Transfer to Reserves

The Company proposes to transfer Rs. 356.62 Lakhs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2909.86 Lakhs is proposed to be retained in the Profit and Loss account.

Research & Development

Continuous R&D initiatives have yielded results during the year with major reductions in consumption coefficients and productivity has gone up vis-a-vis utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development in the following areas.

- Identification of New products and development of latest process technologies

- Continuous improvement of processes and fine tuning process parameters to optimize utilization of energy, utilities and raw materials consumption.

- Backward and forward integration of products to improve value chain.

During the year, your company has spent in R& D activities as under:

- R&D Capital Expenditure - Rs. 85.35 Lakhs

Expansion / Diversification

The following expansion / diversification projects were undertaken during the year:

Specialty Chemicals Division

- New plant for manufacture of Methylamines with an installed capacity of 30000 MT per annum at MIDC, Chincholi, Solapur, Maharashtra has been commissioned in March 2012 and declared commencement of commercial production.

- New plant construction activities are in advanced stages for manufacture of DMF and DMA derivatives at MIDC Chincholi, Solapur.

Hotel Division

- Construction is in full swing for development of 100-room Hotel Property at Solapur to be operational by March 2013. A formal agreement with Sarovar Group of hotels has been entered for operating / managing the Hotel Property.

Fixed Deposits

The company has not accepted any deposits falling within the provisions of Section 58A of the Companies Act, 1956.

Directors

In terms of Article 134 of the Articles of Association of the company Sri G. Hemanth Reddy and Sri S.V. Pattabhiraman retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

Their profile describing the expertise in specific functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

During the year, Sri M Amarender Reddy and Sri Chavali Satyanaraynna Murthy were appointed as Additional Directors w.e.f 30.01.2012 As per the provisions of Section 260 of the Companies Act, 1956 their term of office is due to expire at the conclusion of this Annual General Meeting. The Company has received notices in writing, proposing their appointment as Directors of the Company. The relevant resolution proposing their appointments as Directors is included in the Notice of the Annual General Meeting for your approval.

Consolidated Financial Statements

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited is provided in the Annual Report. The annual accounts of the subsidiary and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the administrative and registered office of the company.

Auditors

M/s V.Sridhar & Co, Chartered Accountants, Hyderabad, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received letter from the Auditors to the effect that, their appointment, if made , would be within the prescribed limits under section 224 (1B ) of the Companies Act, 1956 and that they are not disqualified for such re-apppintment within the meaning of section 226 of the said Act.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Administrative Office of the Company.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed hereto.

Directors' Responsibility Statement

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) In the preparation of Annual Accounts for the financial year ended 31s* March, 2012, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and statement of profit and loss of the company for that period:

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

(iv) The directors have prepared the annual accounts on a going concern basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure A and forms part of this report.

Corporate Governance

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Industrial Relations

The relationships with employees, suppliers and customers across the Company are cordial.

Corporate Social Responsibility

The Company has undertaken various community projects through its social arm Balaji Foundation and Research Centre in and around Solapur / Osmanabad district areas for the following activities:

- Conducting regular Health camps in villages where there are no doctors.

- Employing rural youth by providing appropriate vocational training.

- Mentoring rural youth for pursuing their dreams in education, sports and other activities.

- Arranging Doctor visits for villages where there is no doctor.

- Providing teaching aids and laboratory equipment for the needy schools in rural villages.

- Helping the libraries in rural areas in procuring latest books.

Acknowledgments

Your Directors acknowledge the value of tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and Behalf of the Board of Directors

Place : Secunderabad A Prathap Reddy

Date : 3 May 2012 Chairman & Managing Director

Mar 31, 2011

The Directors have pleasure in presenting the Twenty Third Annual Report of the company with Audited Statement of Accounts for the year ended 31st March, 2011.

Financial Results

The financial highlights for the current year in comparison to the previous year are as under:

(Rupees in Lakhs)

Sl. Current Year Previous Year No. Particulars (2010-2011) (2009-2010)

1 Gross Sales 38,504.69 27,713.98

2 Less: Excise Duty 2795.13 1,524.40

3 Sales 35,709.55 26,189.58

4 Other Income 193.14 145.63

5 Expenditure 33,846.50 23,487.12

6 Profit before interest, depreciation and tax 6479.70 4,774.24

7 Depreciation 826.10 683.60

8 Profit before interest & tax 5653.60 4,706.44

9 Interest and Finance Charges 1355.83 970.59

10 Prior Period items 0 36.40

11 Profit before tax 4,297.78 3,156.45

12 Provision for Income tax 955.40 530.00

13 Deferred tax 681.02 561.50

14 Profit after tax 2,661.36 2,064.95

15 Dividend for the year (including corporate dividend tax) 226.69 189.94

16 Transfer to reserve 266.14 210.00

17 Balance carried forward to Balance Sheet 2,168.53 1,665.41

18 Reserves (Excluding Revaluation reserves) 10,706.63 8,271.96

19 EPS (Rs) 8.21* 31.87#

*EPS worked out on Equity Shares of face value of Rs. 2/- # EPS worked out on Equity Shares of face value of Rs. 10/-

Operating Results and Business

During the year, your company has achieved a Gross turnover of Rs. 385.05 Crore as compared to the turnover of Rs. 277.14 Crore during the previous year. Your company registered an impressive year on year growth of 38.94%, Profit After Tax is Rs. 26.61 Crore in the current year as compared to Rs. 20.64 Crore recording a growth of 28.92%.

Your Companys excellent performance is primarily attributed to the product mix, increase in value chain and increase in plant efficiencies which has optimised the consumption co-efficients of materials compared to previous year and stringent cost control measures implemented by the management across the plants.

Exports: The net exports have increased by 12.30% over the previous year figures of Rs. 67.17 Crore to Rs. 75.43 Crore. The Companys products are well placed in the Global Market. During the year, your company has registered under "REACH" for supplying one of the products to EU countries which go through stringent Quality checks. Your company is the first company to register under REACH from India for this product

Dividend

Based on companys performance and track record of declaring dividends to shareholders, the Directors are pleased to recommend for approval of the members a dividend of Rs 0.60/- per share (30% on paid up value of Rs 2/- per share). The total cash outflow on account of dividend payable including dividend distribution tax payable is Rs. 226.69 lacs.

Transfer to Reserves

The Company proposes to transfer Rs. 266.14 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2,168.53 lacs is proposed to be retained in the Profit and Loss account.

Subdivision of Equity Shares

During the year the companys equity shares were sub-divided from Rs. 10/- per share to Rs. 2/- per share as per the special resolution passed by the members of the company at their 22nd Annual General Meeting of the Company held on 8th September, 2010 in order to improve the liquidity of the Companys shares in the stock market and to make it affordable to small investors.

Research & Development

Continuous R&D initiatives have yielded results during the year with major reductions in consumption co-efficients accompanied by increase in utilization of resources. Your company has become one of the leaders in Specialty Chemicals among International Specialty Chemical Industry and plans to be among top five Aliphatic Amines Manufacturing Companies in the years to come.

Your Company has been setting aside sizable money for continuous Research and Development for the following activities.

- Identification of New products and development of latest process technologies for the same.

- Continuous improvement of process and fine tuning process parameters to optimize utilization of energy, utilities and raw materials consumption.

- Backward and forward integration of products to improve value chain.

- During the year, your company has invested in R & D activities as under.

- R & D Capital Expenditure - Rs. 1.33 Crores.

Expansion / Diversification

The following expansion/ diversification projects were undertaken during the year:

-New project of 15000 MT per annum installed capacity of GBL, NMP / 2P at MIDC, Chincholi, Solapur has been commissioned during the year.

-New plant for manufacture of Methylamines and Ethylamines is proposed with an installed capacity of 30000 MT per annum at MIDC, Chincholi which will be commissioned during the last quarter of FY 2011-12.

-1.5 MW capacity wind mill at Satara has been commissioned and has started generating power from September 2010.

-Construction is in full swing for development of 100 Room Hotel Property at Solapur to be operational by mid 201 2. An agreement has been formalized with SAROVAR Group of Hotels for operating / managing the Hotel property.

Fixed Deposits

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1 956 read with the Companies (Acceptance of Deposits) Rules, 1 975 from the public during the financial year.

Directors

In terms of Article 134 of the Articles of Association of the company Sri S. Vishnu Rao, Sri N. Rajeshwar Reddy and Sri M.R. Krishnaiah retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

Their profile describing the expertise in specif c functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report which is part of the Annual Report.

Consolidated Financial Statements

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report. The annual accounts of the subsidiaries and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the administrative and registered office of the company.

Auditors

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

Particulars of Employees

In terms of the provisions of Section 2 17 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1 975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Administrative Office of the Company.

Managements Discussion and Analysis Report

Managements Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed hereto.

Directors Responsibility Statement

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

-in the preparation of Annual Accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any

-the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss account of the company for that period:

-the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

-the directors have prepared the annual accounts on a going concern basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure A and forms part of this report.

Corporate Governance

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Industrial Relations

The relationships with employees, suppliers and customers across the Company are cordial.

Social Responsibility

The Company has undertaken various community projects in and around Solapur / Osmanabad districts areas through Balaji Foundation & Research Centre for improving the following:

a. Started a clinic with a visiting Doctor for rural underprivileged, needy people at Tamalwadi in a place provided by Village Gram Panchayat.

b. Conducting regular Health camps in villages where there are no doctors.

c. Mentoring rural youth for pursuing their dreams in education, sports and other activities.

d. Employing rural youth by providing appropriate vocational training.

Acknowledgments

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and on behalf of the Board of Directors

M.R. Krishnaiah Chairman

Place : Secunderabad Date : April 28, 2011

Mar 31, 2010

The Directors have pleasure in presenting the 22nd Annual Report of the company with Audited Statement of Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

The financial highlights for the current year in comparison to the previous year are as under

(Rupees in Lakhs)

S.No. PARTICULARS Current Year Previous Year

2009-2010 2008-2009

1. Gross Sales 27713.98 27358.52

2. Less: Excise Duty 1524.40 2189.84

3. Sales 26189.58 25168.68

4. Other Income 145.63 287.07

5. Expenditure 23487.12 23011.75

6. Profit before interest, depreciation and tax 4774.24 3990.55

7. Depreciation 683.60 481.56

8. Profit before interest & tax 4706.44 3508.98

9. Interest and Finance Charges 970.59 1018.60

10. Prior Period items 36.40 0.00

11. Profit before tax 3156.45 2490.38

12. Provision for Income tax (including FBT) 530.00 325.00

13. Deferred tax 561.50 632.72

14. Profit after tax 2064.95 1532.66

15. Dividend for the year (including corporate dividend tax) 189.54 147.95

16. Transfer to General Reserve 210.00 120.00

17. Balance carried forward to Balance Sheet 1665.41 1264.70

18. Reserves(Excluding Revaluation reserves) 8271.96 6396.55

19. EPS (Rs) 31.87 23.65

OPERATING RESULTS AND BUSINESS

During the year, your company has achieved a Gross turnover of Rs. 277.14 Crore as compared to the turnover of Rs. 273.58 Crore achieved during the previous year. This growth was achieved despite Global slowdown and consequent pressure on prices and volumes. However, even with a marginal increase in turnover, your company registered an impressive year on year growth of 34.70% in Profit After Tax from Rs.15.33 Crore in the previous year to Rs. 20.65 Crore in the Current year.

Your Companys consistent performance can be primarily attributed to increase in plant efficiencies, continuous power supply through captive co-generation power plant and long term purchase contracts entered with suppliers of raw materials which has optimised the consumption co-efficients of materials compared to previous year and stringent cost control measures implemented by the management across the plants.

Exports: Though the Gross turnover increased marginally, the net exports have increased by 14.56% over the previous year figures of Rs. 58.20 Crore to Rs. 67.17 Crore.

DIVIDEND

Based on companys performance and track record of declaring dividends to shareholders, the Directors are pleased to recommend for approval of the members a dividend of Rs 2.50/- per share (25% on paid up value of Rs 10/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 189.54 lacs.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 210 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 1665.41 lacs is proposed to be retained in the Profit and Loss account.

RESEARCH & DEVELOPMENT

The R&D initiatives have yielded results during the year, and have been one of the major contributories in making the company stand by Global majors in Specialty Chemicals, among International Specialty Chemicals business.

Your Company has been setting aside sizable money for continuous Research and Development for the following activities.

- Identification of New products and latest technologies for the same.

- Continuous development of process parameters to optimize energy, utilities and raw materials consumption.

- Backward and forward integration of products.

During the year the company has invested in R& D activities as under: R & D Capital Expenditure - Rs. 622.07 lacs R & D Revenue Expenditure - Rs. 277.70 lacs

EXPANSION / DIVERSIFICATION

The company with a view to expand and diversify into new area of Business, envisaged construction, development and leasing out properties for hotel and other related business has amended its Other Objects Clause in the Memorandum of Association to include these objects and passed a special resolution for the commencement of these businesses. The company plans to utilize the available vacant lands in upcoming areas of Solapur for these purposes. The company has appointed Mahajan & Aibara, experienced consultants in Hotel and Restaurant Industry for giving feasibility report for the usage of existing land, who have submitted a report after thorough study. Accordingly, your Company has proposed to setup a Hotel with 100 rooms and banquet facilities with an investment of Rs. 40 Crore. The project will be completed over a period of 2 years from now.

During the year, the following plants have come into operation:

- 2.5 Mw Co- Generation Power Plant at Tamalwadi, Solapur has been commissioned in July, 2009

- PVP Plant at Chincholi, Solapur has started producing various grades and the mandatory approvals are in final stages.

FIXED DEPOSITS

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Sri T Naveena Chandra and Sri D. Ram Reddy retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

The Board of Directors at its Meeting held on 29th April, 2010 has re-appointed Mr. A. Prathap Reddy as Managing Director, Mr. N. Rajeshwar Reddy as Executive Director, Mr. D. Ram Reddy as Director-Commercial & Mr. G. Hemanth Reddy as Whole time director for a period of three years w.e.f from 1st April, 2010, subject to the approval of the Members.

The said resolution forms part of the notice of the Annual General Meeting Their profile describing the expertise in specific functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the notice of AGM.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report.

AUDITORS

M/s V.Sridhar & Co, Chartered Accountants, Hyderabad, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received letter from the Auditors to the effect that, their appointment, if made , would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for such re appointment within the meaning of section 226 of the said Act.

PARTICULARS OF EMPLOYEES

There are no employees whose particulars are required to be furnished under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975, and as amended from time to time as remuneration of none of the employees is in excess of Rs.2,00,000/- per month, if employed for the part of year or Rs.24,00,000/- per annum during the financial year 2009-10. The remuneration details of the Whole Time Directors have been disclosed in the Corporate Governance Report which forms part of Directors Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms the part of the Annual Report and is annexed hereto.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss account of the company for that period:

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

(iv) the directors have prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure and forms part of this report.

CORPORATE GOVERNANCE

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

INDUSTRIAL RELATIONS

The relationship with employees, suppliers and customers across the Company are cordial.

SOCIAL RESPONSIBILITY

The Company has undertaken various community projects in and around solapur/ osmanabad district areas through Balaji Foundation & Research Centre. The Company has undertaken the following activities during the year.

a. Started a clinic with a visiting Doctor for rural under privilged, needy people at Tammalwadi in a place provided by village Gram Panchayat.

b. Conducting Health camps in villages where there are no doctors.

c. Encouraging rural youth for pursuing their dreams in education, sports and other activities.

d. Employing rural youth by providing appropriate vocational training.

ACKNOWLEDGMENTS

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels towards its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and on behalf of the Board of Directors

Secunderabad M. R. KRISHNAIAH

29 July, 2010 Chairman

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